Indian business and Saudi prince to control basmati distribution in ME

26-Feb-20142014-02-26T00:00:00Z - By RJ WhiteheadRJ Whitehead

An Indian conglomerate and a Saudi prince have teamed up with plans to make Dubai a regional hub for basmati rice—the leading food imports from the subcontinent to the Middle East.

Prince Mishaal bin Abdullah bin Turki bin Abdulaziz Al-Saud and Lakshmi Energy and Foods have set the ball rolling by forming a joint-venture operation for the storage, processing, packaging and distribution of basmati across the Middle East from the city-state.

Aiming to invest AED100m (US$27m) over the next year, Pan Gulf Foods and Industries, as the partnership will be known, will focus on the storage of up to 100,000 tonnes of basmati rice in its first year, as well as a processing, polishing and packaging facility.

Further operation

The joint-venture will also set up Innovo Specialty Foods JLT, which will market and distribute basmati rice processed and packed by Pan Gulf exclusively across the Middle East and North Africa.

Innovo aims to sell 80 percent of its products through large trade channel partners, importers and distributors. The balance will be distributed to wholesale and retail outlets across the GCC from its warehouse.

Basmati rice has bonded India and the Gulf for centuries. Indeed, the fine, long grained, fragrant basmati rice is the leading imported food item into the Middle East. It is almost exclusively grown in both Indian and Pakistani Punjab, as well as a small region at the foothills of the Himalayas. India alone accounts for 70% of world's supply of the crop.

Supply chain

LEAF has one of the biggest basmati rice manufacturing facilities in the world, with a mill spread over 125 acres and an annual processing capacity of over 1m tonnes of paddy rice and over 350,000 tonnes of polished/finished basmati rice.

The ever increasing demand for basmati rice has been primarily driven by Saudi Arabia, which along with Yemen, Iran, Iraq and other GCC countries accounts for over 4m tons of basmati rice consumption every year.

“Many initiatives like Pan Gulf Food and Industries are required to meet the increasing demand for quality basmati rice in this region,” said Raman Kumar of LEAF, which has a network of over 300,000 farmers in Punjab.

“Active involvement of large international basmati rice manufacturing companies with renowned supply chain, and distribution companies acting as partners to meet this increasing demand has become inevitable.”